South African bidders gear up for liquid gas power plant

Bidding for government’s 2 000 megawatt liquid gas power plant at Richards Bay, announced last week as part of a R50 billion plan to boost South Africa’s gas industry, is set to begin next August.

While the time frames for the power plant – which, along with a second plant at Coega, will generate a total of 3 000MW of electricity from liquid gas – have not been finalised, all indications are that a final request for proposals will be issued by August next year, following an initial information process.

The bidders will then have six to 15 months to submit bids, with the adjudication process then taking up to another 18 months before the final award for the project will be made.

The project will see liquid natural gas turned into electricity and passed on to the Eskom grid using imported gas from countries like Mozambique and, if exploration is successful, gas mined locally. It is also aimed at boosting the local gas industry, both in Richards Bay, where there is a massive energy demand owing to the presence of several mines and smelters, and elsewhere.

On Tuesday, the Richards Bay Industrial Development Zone (IDZ), the Umhlatuze municipality and the KwaZulu-Natal economic development ministry held a briefing to outline the initial process.

IDZ CEO Pumi Motsoahae said the construction phase of the project would create a “substantial” number of jobs, while the operation of the facility’s floating storage regasification unit, the actual power plant and the construction and maintenance of the gas pipeline would generate job opportunities.

“The bulk of the jobs are likely to come in the development of the gas pipeline and in the spin-offs of the development of the gas industry, such as installers and maintainers of gas reticulation for industry and domestic use, and the development of industries using or converting gas,” he said.

Motsoahae said Richards Bay was in an “ideal” position for the evacuation of energy into the grid.

“Richards Bay has substantial heavy industry, including the biggest aluminium smelter in the southern hemisphere. There is thus a substantial demand for electricity and the power infrastructure used to bring power into Richards Bay can be reversed to take power back into the grid,” he said.

Gas would also be piped to Secunda, Durban and Pietermaritzburg using new and existing pipelines, and to a new peaking plant at KwaDukuza on the lower KwaZulu-Natal north coast.

Umhlatuze Mayor Mduduzi Mhlongo said the city had already set aside 20 hectares in the Bay Side area for the creation of the plant.

Mhlongo said the city would start working with the University of Zululand and the uMfolozi TVET College to ensure that enough industry-based skills were generated in the area by the time the gas project started.

The city would also start talking to businesses that had earlier wanted to invest in Richards Bay, but could not because of a lack of power, while new industries making use of gas would be encouraged to invest in the area.

Richards Bay, he said, should now move beyond a coal and mineral export harbour to also include acting as a “gas hub” for the region.

It is not clear when the process of supplying power to Eskom – which has thus far been opposed to the use of liquid natural gas to generate electricity – will be negotiated by the energy department.

Desiree Otto, the stakeholder relations officer for the department of energy’s Independent Power Producer project, said the department was “working closely” with Eskom to address the power utility’s “concerns in relation to renewable energy”.

She said Eskom “did not formally raise concerns about the gas programme”.
source: Fin24